The Software IP Report

PGR Gives a Second Bite at Patent-Ineligibility

Recent PTAB decisions on petitions for Post-Grant Review (PGR) demonstrate how little deference judges can give to patent examiners patent-eligibility decisions.  Even if the USPTO in the form of a patent examiner has deemed claims patent-eligible under 35 U.S.C. § 101 and the Alice/Mayo test, the USPTO in the form of the PTAB may turn around and deem the claims unpatentable under Section 101 . Two recent cases saw the Patent Owner make the argument that it needs to make under 35 U.S.C. § 325(d), namely that the Petitioner was simply rehashing arguments already rejected by a patent examiner. These arguments were to no avail. As the PTAB receives more and more petitions for Post-Grant Review on Section 101 grounds, we may see the PTAB second-guess the examining corps regarding the patent-eligibility of more and more recently-issued patents.

In Supercell Oy v. Gree, Inc., Case PGR2018-00061, Patent 9,700,793 B2 (PTAB Oct. 16, 2018), the PTAB granted a petition to institute a Post-Grant Review on grounds including Section 101. Claims of US Patent No. 9,700,793 are directed to updating state information in game screens. Under part one of the Alicetest, the Petitioner identified the “abstract idea of generating and outputting information relating to game screen(s) in response to an instruction received from a user.” Concerning part two of the Alicetest, the Petitioner argued that the claims simply used generic technology and did not capture “the purported inventive concept described in the specification” of “generating information relating to the second game screen when there is a margin in the processing of the game to purportedly reduce the influence of the communication state or performance of hardware.” The PTAB agreed, at least for purposes of instituting the PGR.

In AvePoint, Inc. v. OneTRust, LLC, Case PGR2018-00056 Patent 9,691,090 B1 (PTAB Oct. 11, 2018), US Patent No. 9,691,090 was directed to “operationalizing privacy compliance and assessing the risk of various respective privacy campaigns.” The independent claim directed to this concept was really, really long, a fact that a cynic might suspect contributed to its allowance. The PTAB agreed that the claims were analogous to those at issue in FairWarning IP, LLC v. Iatric Sys., Inc. (Fed. Cir. 2016) and Electric Power Group, LLC v. Alstom S.A. (Fed. Cir. 2016), and might be shown to be “directed to nothing more than the abstract idea of assessing the risk of a business’s personal data being compromised.” The claims “despite their prolixity, . . . fail to differentiate meaningfully from ordinary mental processes that humans have been undertaking for years.” (Citing Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass’n.(Fed. Cir. 2014)). And there was no inventive concept, because the claims simply relied on generic computing technology.

But what about the fact that both of the above patents had recently been allowed by patent examiners? Section 325(d) states that “[i]n determining whether to institute . . ., the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.”  In Supercell Oy, the PTAB dismissed the Patent Owner’s Section 325 argument by stating that the Petitioner had asserted a different abstract idea than the abstract idea alleged by the patent examiner, and noting new Federal Circuit precedent since the patent had issued.  In AvePoint,the Patent Owner argued that the petitioner had simply reiterated the patent examiner’s Section 101 rejection, providing the PTAB with reason to dismiss the PGR petition. Instead, the PTAB dismissed the Patent Owner’s argument, explaining that:

The Examiner did not have the benefit of evidence showing that the claimed “risk factors,” identified as the reason for allowance [internal citations omitted], were routine and conventional aspects of any data protection risk assessment, as discussed above. Thus, we do not believe the particular circumstances of this case warrant invoking our discretion under 35 U.S.C. § 325(d).

PGR activity will of course be limited by the deadline for filing a petition within nine months of a patent’s issuance. And the above cases are simply decisions to institute PGR proceedings, not final decisions of on patentability. Nonetheless, these cases illustrate that even where a patent examiner was presumably acting under the law as it has developed since Mayoand Alice, the examiner’s decision on patent-eligibility, far from sacrosanct or even being entitled to a presumption of correctness, may get practically no deference at all.

Finally, as a footnote, Supercell Oy has petitioned for PGR proceedings with respect to numerous patents owned by Gree, Inc. One of these was denied because the patent’s priority date disqualified it from Post-Grant Review, Supercell Oy v. Gree, Inc., PGR2018-00064, Patent 9,737,816 B2 (PTAB Oct. 18, 2018), but another was denied because a PTAB panel (different from the panel for the ’793 patent) thought that the petitioner had not shown a likelihood of patent-ineligibility of claims of US Patent No. 9,662,573, directed to an “incentive giving function.”  Supercell Oy v. Gree, Inc., PGR2018-00037, Patent 9,662,573 B2 (PTAB Sept. 4, 2018).  Go figure.